Our unique insight into the UK mid-market
Every two months, we survey 600 mid-sized business leaders across the country to understand their expectations and priorities for the future.
We use this data to track changing market sentiment over time and explore topical issues and challenges facing mid-sized businesses in the UK.
Here's what the latest February survey told us.
Optimism about the outlook of the UK economy has rebounded in February, jumping significantly to 75%. This is +6 percentage points higher than the rolling average since the Tracker began in January 2021. Those who are pessimistic also halved in February, compared to December, reaching the lowest level seen since August 2023.
Optimism on the outlook of the UK economy over next 6 months
As inflation remains steady, the February Tracker saw optimism around future revenue growth skyrocket by +21 percentage points (pp), compared to the last round in December, up to 79%. Optimism is now +8pp higher than the rolling average. The level of respondents pessimistic about their growth, which had been increasing since August last year, dropped significantly to one of the lowest levels recorded.
Optimism on business revenue growth over next 6 months
With interest rates likely to have reached their peak, businesses’ confidence in their funding position has jumped in February, up +22 percentage points compared to December. The number of those pessimistic in their position also decreased significantly, after a steady incline since August last year, dropping from 17% to just 5% - one of the lowest levels ever recorded by the Tracker.
Optimism on business funding position over next 6 months
As business optimism increases across the board, those expecting their profits to rise rose by 50% compared to December, rebounding up to 69%. This is significantly higher than the rolling average (55%). There was also a drop in the number of respondents expecting their profits to decrease – falling from 32% in December, to 20% in February.
Profit growth expectations over next 6 months
“It’s encouraging to see increased levels of optimism across our Tracker in this round. The number of respondents optimistic about the UK economy in February is much higher than we’ve seen recently, and higher than the rolling average since 2021, which shows a renewed sense of confidence in the market since December. While it’s now been confirmed that the UK fell into a technical recession at the end of last year, businesses still have good reason to be feeling optimistic. Inflation has more than halved from its double digit high and remains steady, and interest rates seem to have reached their peak and are expected to drop through this year.
“While optimism is high, with an upcoming Budget in March and election likely at some point this year, businesses need to seize this opportunity. The government and major parties are listening, so businesses should prioritise outlining what they want and need from government, to boost growth and productivity across the country.”
As confidence climbs sharply across the market, this has fed into businesses’ investment expectations, which have increased across all areas monitored by the Tracker. The biggest increases were seen in skills development, growing internationally, recruitment and technology.
“Renewed confidence in the outlook of the UK economy in turn boosts confidence about businesses’ own growth potential and ability to increase investment across core areas - this is a recurring trend that we’ve seen in our Tracker. But it’s not just confidence in the UK’s economic performance that drives this, businesses also want certainty. Certainty in how they expect the economy to perform and certainty around economic policy. It’s much harder for businesses to plan and confidently make investment decisions if there’s uncertainty.”
Schellion Horn, Economics Consulting Partner at Grant Thornton UK LLP
New research from leading business and financial adviser Grant Thornton UK LLP finds that, while it’s been confirmed that the UK entered a technical recession at the end of last year, business revenue growth expectations have rebounded this month as inflation remains steady and interest rates were held for the fourth time in a row.
